Some of the world’s biggest infrastructure investors are clubbing up to take over GFL Environmental Inc. in what could be one of the largest leveraged buyouts of the year.
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KKR & Co., Energy Capital Partners and Blackstone Inc. are bidding together while Brookfield Asset Management and IFM Investors have teamed on a rival bid for the waste manager, according to people familiar with the matter. A decision could be made in the coming weeks, said the people, who asked to not be identified because the details are private.
GFL gained as much as 8.4 per cent to $62.29 in Toronto on Thursday, its highest price since April. The waste-management company is among the top performers on the S&P/TSX Composite Index.
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GFL’s special committee is expected to take time to evaluate the proposals and could ask bidders to improve their offers, the people said.
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No final decision has been made, the timing could change, other bidders could emerge or the consortiums could change, the people added.
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Representatives for Energy Capital, IFM and Blackstone declined to comment. Spokespeople for GFL, KKR and Brookfield didn’t respond to requests for comment.
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The field of suitors underscores how giant alternative asset managers are eager to put money to work in infrastructure, banking on steady, long-term growth in the sector. It also harkens back to the leveraged buyout boom of the early 2000s, when buyout shops partnered on major take-privates in retail, energy and healthcare.
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Club deals fell out of favour due to weak returns and difficulty exiting. Private equity fund investors also didn’t like them because of the concentrated risk. They’ve re-emerged in recent years in instances where buyout firms have gone after jumbo targets such as AES Corp.
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The GFL pursuit also illustrates the financial wherewithal necessary for a deal of this size. GFL has a market value of about US$19 billion, plus US$10 billion in debt. The takeover of AES, at about US$33 billion including debt, ranks as the largest announced North American LBO of 2026.
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GFL, with its bright-green trucks that collect household and business garbage, is one of the largest and most visible waste managers in North America, with 15,000 workers and operations throughout Canada and United States. Describing itself as the fourth-largest environmental services company on the continent, it also owns transfer stations, recycling facilities and landfills.
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GFL announced in July that it had formed a special committee to oversee potential merger talks, after retaining advisers following preliminary takeover interest, Bloomberg News reported at the time.
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Chief executive Patrick Dovigi, who built GFL with the help of private equity backers before taking it public in Toronto in 2020, has said he would roll all of his ownership stake into any deal. Management maintaining a stake is a classic LBO structure.
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Dovigi told Bloomberg TV Wednesday that he’s open to taking the company private at a higher valuation than its current stock price.
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GFL, which has done scores of acquisitions, just completed its combination with Secure Waste Infrastructure Corp., expanding in western Canada and in industrial waste management and energy infrastructure.
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—With assistance from Ryan Gould, Amy Bainbridge and Stephanie Hughes.
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